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World Economy
Apr 14, 2026

Qantas hikes fares and trims domestic schedule as Iran‑driven Middle East unrest redirects travelers to Europe

AI Summary
Qantas is raising ticket prices and cutting roughly 5% of its domestic capacity for May‑June, reallocating aircraft to high‑demand European routes after Gulf carriers reduced services amid the Iran conflict, while its fuel bill is projected to surge to $3.1‑$3.3 billion, prompting warnings of further fare increases.

Qantas announced a fare increase and a 5% reduction in domestic capacity for May and June, responding to a rapid shift in passenger demand away from airlines that transit the conflict‑ridden Middle East.

In a market update released on Tuesday, the carrier said it is redeploying aircraft from its U.S. and domestic networks to capture strong interest in Europe‑bound travel, especially to Paris and Rome. The move follows service cuts by Persian Gulf carriers such as Emirates, Etihad and Qatar Airways, which have scaled back flights amid the escalating Iran conflict.

To accommodate the new focus, Qantas and its low‑cost arm Jetstar will cut capacity across their domestic networks by about 5%, trimming frequencies on key inter‑city routes and suspending several regional services. Four temporary suspensions will take effect in mid‑May: Melbourne‑Hamilton Island, Melbourne‑Coffs Harbour, Sydney‑Busselton and Darwin‑Gold Coast.

In addition, the Adelaide‑Mount Gambier route will be discontinued indefinitely due to low demand and soaring fuel costs.

The airline warned that its jet‑fuel expenses are set to rise sharply, projecting a second‑half 2026 fuel bill of $3.1‑$3.3 billion, up from the previously forecast $2.2 billion. This surge is driven by higher oil prices linked to the Iran conflict.

To offset the cost pressure, Qantas has already raised ticket prices and signalled that “further action” – likely additional fare hikes – may be necessary. While airlines typically use hedging contracts to lock in fuel prices, the current volatility limits the effectiveness of such safeguards.

Following the market update, Qantas shares slipped more than 3% in early trading before stabilising, reflecting investor concern over the combined impact of higher fares, reduced domestic capacity, and elevated fuel costs.